HP has committed to a substantial workforce reduction of 4,000 to 6,000 employees worldwide by October 2028, representing a significant restructuring of its 56,000-person organization. The California-based technology company positions the decision as fundamental to its artificial intelligence strategy, with CEO Enrique Lores emphasizing AI’s potential to transform product innovation, customer service, and overall productivity.
The job eliminations will primarily impact teams working in product development, internal operations, and customer support functions. HP projects the restructuring will cost $650 million initially but generate $1 billion in annual savings by 2028. This marks the company’s second round of layoffs in the current year, following the reduction of 1,000 to 2,000 positions in February.
Financial results show HP exceeding revenue expectations with $14.6 billion in fourth-quarter sales. The company has successfully penetrated the AI-enabled computer market, with these advanced products accounting for more than 30% of shipments in the quarter ending October 31. Consumer and enterprise demand for AI-integrated computing solutions continues growing robustly.
Despite strong revenue performance, HP issued disappointing earnings guidance for the coming year. The company expects adjusted net earnings between $2.90 and $3.20 per share, below the analyst consensus of $3.33. Rapidly rising memory chip costs, driven by intense demand from AI datacenter operations, have significantly impacted production expenses. Memory now represents 15-18% of typical PC costs, with recent price increases exceeding projections.
The announcement triggered a 6% decline in HP stock value. The company’s workforce transformation aligns with widespread industry trends as businesses increasingly leverage artificial intelligence and automation to optimize operations, reduce costs, and enhance competitiveness, reshaping employment across the technology sector.